Investing in rental estate is a smart move regardless of the current state of financial markets
After any downturn in real estate, it can be difficult to begin investing again. However, if you take the right approach, pretty much any time is a good time to invest. You just have to do it wisely, and investing in rental real estate is one such method.
- Investing in real estate at any time allows you to leverage your capital for a higher long-term return. Money you get from rent will quickly make up for the cash you put down for your down payment.
- Buying rental property is a good idea in the long term because the value of the property will almost certainly appreciate as long as you do maintenance and upkeep. Strategies to defer your taxes also help?look into installment sales, charitable trusts and 1031 exchanges.
- Your cash flow essentially amounts to no taxation because of mortgage interest deductions and depreciation. Not only that, you may have tax deductions you can use for other income streams. Consult with a tax adviser first, though. Know what to expect and don’t go into anything unaware of tax implications.
- Investing in real estate for rental purposes expands your toolbox of possible tax deductions. For example, if you bought a property to rent to college students at a beach town, you can deduct most travel and expense costs when you travel there to check on your property. You get to combine a vacation with pleasure and take tax deductions.
- Rental real estate helps cash flow coming in, which is important especially if you?re past retirement age. It?s a retirement plan all in itself.
- You could buy one rental property a year (or every couple of years) and attain economic goals you never thought you could.